NH Prime REIT readies IPO for $60 mn, pricing on Nov. 14

2019.11.08 13:32:45 | 2019.11.08 13:33:19

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NH Prime REIT Co., real estate investment trust of South Korea’s Nonghyup Financial Group, is readying an initial public offering (IPO) after successful stock debut of Lotte REIT last month amid soaring retail interest in property investments.

The company in a public disclosure on Friday said it eyes up to 68.8 billion won ($59.6 million) from the offering of 13.76 million in common shares at 5,000 won apiece. Book-building is scheduled on Nov. 13-14, and public subscription on Nov. 18-20. The share of the public subscription is set at 9.76 million shares or 70.9 percent of total offering.

NH Investment & Securities is leading the IPO, with Korea Investment & Securities, Hana Financial Investment, and Kiwoom Securities as co-underwriters.

NH Prime REIT plans to generate profit by investing in securities whose underling assets are high-value office buildings, such as Seoul Square, Gangnam N Tower, and Samsung C&T’s office in Gangnam in the prime location of Korea’s capital city.

The company projects to deliver dividend yields of around 5.5 percent, lower than Lotte REIT that pitched 6.5 percent annual yield at its public debut late last month. But it is higher compared to earlier market entrants Shinhan Alpha REIT or E-REITs Kocref, which target around 3 percent and 4 percent, respectively.

Moreover, the Korean government is seeking to reduce dividend income tax on investment in publicly traded REIT products, making them more attractive to investors.

The company also plans to invest in properties located in major international cities, which would benefit investors with more stable income and higher yields, said an NH Investment & Securities official.

By Kim Je-lim and Cho Jeehyun

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